Ex-Rabobank trader gets three months in U.S. prison for Libor scheme

Reuters

By Nate Raymond

Photo:

By Nate Raymond

(Reuters) - A former Rabobank trader from Australia was sentenced on Wednesday to three months in a U.S. prison for conspiring to manipulate Libor, the leading benchmark for pricing financial transactions, to the bank's advantage.

Paul Thompson, the Dutch bank's ex-head of money market and derivatives trading for Northeast Asia, was sentenced by U.S. District Judge Jed Rakoff in Manhattan after pleading guilty in July to conspiring to commit wire fraud and bank fraud.

While Rakoff agreed with prosecutors that prison time was warranted, he cited several mitigating factors justifying a short term, including health issues suffered by Thompson and some family members.

"I don't think under all of the factual circumstances a long period of incarceration is required," Rakoff said.

In court, Thompson, 50, apologized for his actions.

"I wish I had stood up against this activity and had not participated in it," he said.

Libor, or the London interbank offered rate, underpins trillions of dollars of financial products globally from mortgages to credit cards. The rate is based on what banks say they believe they would pay if they borrowed from other banks.

U.S. and European authorities have spent years probing whether banks tried to manipulate the rate to benefit their own trading positions.

The investigations have led to around $9 billion in regulatory settlements with financial institutions and charges against several individuals.

Those included Thompson and six other former Rabobank traders charged by the U.S. Justice Department after the bank in 2013 reached a $1 billion deal to resolve related U.S. and European probes.

Prosecutors said Thompson participated in a scheme with others to rig the U.S. dollar and yen Libor rates to benefit Rabobank's trading positions, in which traders sought to influence the bank's Libor submissions.

Thompson, a derivatives trader based in Hong Kong and Singapore, waived extradition in July after being arrested in Australia in October 2015 while two ex-Rabobank traders from the United Kingdom, Anthony Allen and Anthony Conti, were undergoing trial in New York.

Both were convicted in November. In March, Allen and Conti were sentenced to two years and one year in prison, respectively. Both are appealing.

Three other former Rabobank traders--Paul Robson, Takayuki Yagami, and Lee Stewart--have pleaded guilty and have yet to be sentenced. A seventh, Tetsuya Motomura of Tokyo, is considered a fugitive by the U.S. government.

The case is U.S. v. Thompson, U.S. District Court, Southern District of New York, No. 14-cr-272.

(Reporting By Nate Raymond in New York; Editing by Tom Brown and Diane Craft)